Petersburg Pilot -

Assembly advances electric rate increase ordinance

The Petersburg Borough Assembly approved an updated electric ordinance that increases rates by four percent during the next two years.

The current declining block rate structure was established more than two decades ago to encourage electric usage—the more a customer uses, the less they pay on a kilowatt per hour basis. The declining block rate, combined with the rise of oil prices, contributed to a large conversion from oil to electric heating. Beginning around 2012, that conversion began to level out.

During discussions last December over a revenue requirement study with the Borough Assembly, Power and Light Superintendent Joe Nelson said it is time for the rates to flatten as well.

He said the new rates are also designed to reduce the large price difference between small and large commercial customers.

Including harbor, residential, and small and large commercial customers, PMPL would bring in more than $200,000 a year when the full 4 percent increase is established, which would allow PMPL’s budget to stay in the black.

PMPL’s reserve fund contains around $5.8 million, and Nelson said $4 million is the minimum amount of savings required to deal with potential emergencies.

“By and large, for larger consumption we are the best in Southeast,” Nelson said during a meeting with assembly members this spring. “We are the lowest (price). Making a two percent adjustment in that is not going to change this picture.”

Households in Petersburg using around 2000 kilowatts per hour pay around $178 a month. Ketchikan residential customers pay the second lowest price for the same usage at $198.

The average Petersburg residential household uses around 1000 kilowatts per hour and pays $108 a month. Ketchikan was slightly cheaper at the 1000 kilowatt per hour rate by about $6.

According to the revenue requirement study, the average residential customer using 1000 kilowatts per hour would see their monthly electric bill increase by 10 cents.

Residents using more than 1,500 kilowatts per hour will see a monthly increase of around $5.

Before rates are officially raised, the ordinance must be approved by the assembly on two more readings.